Does herd behaviour arise easier under time pressure? Experimental approach

Abstract

In this paper I explain individual propensity to herding behaviour and its relationship to time-pressure by conducting a laboratory experiment. I let subjects perform a simple cognitive task with the possibility to herd under different levels of time pressure. In the main treatments, subjects had a chance to revise their decision after seeing decisions of others, which I take as an indicator of herding behaviour. The main findings are that the propensity to herd was not significantly influenced by different levels of time pressure, although there could be an indirect effect through other variables, such as the time subjects spent revising the decision. Heart-rate significantly increased over the baseline during the performance of a task and its correlation to the subjectively stated level of stress was positive but very weak, which suggests that time pressure may not automatically induce stress but increase effort instead.